Xerox on Tuesday won final approval for the $69 million settlement of a shareholder lawsuit challenging its $6 billion takeover of Affiliated Computer Services.
ACS investors, including the New Orleans City Employees’ Retirement System, sued in Delaware Chancery Court and in state court in Texas alleging ACS directors wrongfully agreed to allow ex-Chairman Darwin Deason to collect more than $1 billion in the buyout. The settlement resolves both the Delaware and Texas claims. The New Orleans system had $256 million in assets as of March 31, 2009, the most recent data available, according to Money Market Directories.
“$69 million is a high monetary benefit” for ACS investors, Delaware Chancery Court Judge Donald Parsons Jr. said in giving final approval to the accord. He also approved $17.2 million in legal fees for investors’ lawyers.
Lisa Weaver, a spokeswoman for Norwalk, Conn.-based Xerox, didn’t immediately return a call for comment on the settlement’s approval.
Under the agreement, according to court papers, ACS will pay $56.1 million and Deason will pay $12.8 million, some subject to insurance payments. Former ACS stockholders who file claims will share what’s left of the settlement fund after legal fees and administrative expenses, according to court papers.
Lawyers settled the case just before a trial had been set to start May 10 in Wilmington before Mr. Parsons.
“We were able to get a hefty chunk of change” for disgruntled ACS shareholders, Stuart Grant, an attorney representing ACS investors, told Mr. Parsons on Tuesday.